Industry News

FTC sues ‘credit repair’ companies

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Two companies targeting Spanish-speaking consumers with claims that they could improve consumers' credit ratings have allegedly violated federal laws, according to the Federal Trade Commission. The FTC has asked a federal district court to halt both companies' illegal business practices and award consumer redress. The FTC alleges that Florida-based Sunshine Credit Repair Inc. and Service Brokers Associates Inc. have violated the Credit Repair Organizations Act (CROA) by: (1) charging consumers money before performing promised services; (2) failing to provide consumers with written statements concerning their credit file rights; and (3) failing to inform consumers of their right to cancel a contract. The FTC further alleges that Sunshine Credit violated the CROA and the FTC Act by making deceptive claims about the company's ability to remove accurate, negative information from consumers' credit reports. According to separate FTC complaints, Sunshine Credit and Service Brokers use Span...